FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : BANK OF IRELAND GROUP - AND - 500 STAFF (REPRESENTED BY UNITE THE UNION) DIVISION : Chairman: Mr McGee Employer Member: Mr Murphy Worker Member: Mr O'Neill |
1. Non-payment of performance-related pay.
BACKGROUND:
2. Bank of Ireland Life (BIL) is an independent, separately authorised life assurance company within the Bank of Ireland Group. It employs approximately 1,000 staff. The Company has operated a performance related pay arrangement since 2001 and remains committed to this arrangement.
Unite Trade Union represents 500 members employed by BIL comprising the former New Ireland /Bank of Ireland Lifetime. Up until the end of 2001 these members received annual increments on agreed scales and increases under various National Wage Agreements as they fell due.
During 2001 a new reward system was agreed. Existing staff had the option of remaining on the incremental scales and National Wage Agreements, or opting on a voluntary basis for the new system. The majority of members transferred to the new system. The reward system included provision for individual review and annual application of pay increases and bonus based on a specific rating (1-5). The pay increase included a cost of living increase and performance pay based on rating achieved. A schedule of awards based on individual ratings was agreed each year between Management and Unite up until 'April 2007.
In 2009 the process did not commence until March and concluded with an announcement by Management that no pay increase or bonus payment at any level would apply.
The dispute could not be resolved at local level and was the subject of a conciliation conference under the auspices of the Labour Relations Commission. As agreement was not reached, the dispute was referred to the Labour Court on the 5th May 2009, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 28th May, 2009.
UNION'S ARGUMENTS:
3. 1.In 2001 the Bank and the Union concluded and signed up to an agreement in respect of a new reward system which committed to rewarding individual performance with pay increases and bonus awards. Transfer from the existing incremental scales and the National Wage Agreements to the new system was voluntary. Rewards were honoured from 2002 to 2008.
2. The Union stated that in 2009 it was advised by Management that no cost of living increase will be applied, that no performance pay increase will be applied, that no pay review bonus will be applied and that no profit-share bonus will be applied. As a consequence, the Union maintains that its members' earnings this year will decrease by between 16% and 20% when compared to expected earnings and by between 11% and 14% when compared to earnings last year.
3. The Union maintains that pay increases which have fallen due across Bank of Ireland Group for comparable workers have been paid in full.
COMPANY'S ARGUMENTS:
4. 1.BIL made a loss in the year ending March 2009. Management maintains that to grant salary increases in the light of this loss and the exceptionally challenging business environment is not justifiable. Despite the business pressures, the Company communicated to staff that it is not seeking salary reductions.
2. The Company maintains that the 2001 Agreement and Staff Handbook clearly state that the cost of living component of the Annual Pay Review will be based on market and national trends. The ESRI wage forecasts for 2009 is for a reduction of 3% and the EU Commission predicts a reduction of 4%.
3. The 2001 Agreement and Staff Handbook clearly state that a merit increase and bonus is "determined each year based on both individual and Company performance". The Company does not consider it to be responsible or appropriate to make merit/bonus payments when the Company has been loss-aking.
RECOMMENDATION:
The Court, having carefully considered the submissions of the parties, recommends as follows, mindful of its view, long held, that Joint Agreements are valid unless and until they are altered, renegotiated or abandoned by agreement.
- A cost of living increase should be paid, as per the terms of the Annual Pay Review (as set out in clause 6 of the Staff Handbook of August 2001) in respect of the year ending 31st March 2009.
- Appropriate increases should be paid to staff, relative to their personal performance ratings, under the same Agreement in the 2001 Staff Handbook, in respect of the year under review.
The Court so recommends.
Signed on behalf of the Labour Court
Raymond McGee
3rd June, 2009______________________
MG.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Madelon Geoghegan, Court Secretary.